Stanley Combs\’s Blog

    Well, we made it through Thanksgiving and now it’s on to Christmas–hopefully a Merry Christmas to you and yours.   I’m looking forward to having a Christmas tree this year as we did not have one last year.   This is because I joined the national average of ‘one person in three over the age of 65 suffering from falls.’   I fell quite a distance off the ladder when getting down the Christmas decorations and injured the discs in my back and tore tendons loose in my shoulder.   So I urge everyone , when you are on or near a ladder, be very careful–I know I will!  

    I’m getting ready to build a shed to store everything that is in the loft, and asking someone else to pull it down from above for me.   I urge you, when you get down or put up your Christmas decorations, Please be careful and have a Merry Christmas!!

                  New at this or an old-timer, some tips help make the chore easier.   First try this: get a local map, draw a circle around a portion of the city that you are interested in.   This may take in the entire city or a small portion; what™s important is to design a focal point to work in.   Then begin to eliminate the areas you do not wish to work in.   Start by eliminating any areas where you might need a bulletproof vest.   Remove all industrial and or commercial areas, this will include factories, airports and/or warehouses.   Next remove the high-priced homes.   If done correctly, you now have the middle-priced to the low-income properties and neighborhoods.

                      If you are not familiar with the area, talk to the local postal worker, meter reader, title company, or anyone else who might know the area.   Here™s a good tip: contact the local chapter of Habitat for Humanity to ask where they are building.   They search out neighborhoods that have been neglected but are now on the mend and coming back.   This is a great area to search for a property to purchase.

                      Now you need to determine the market value for the targeted area.  It will be best to work with a real estate agent or a broker.   The main difference between the two would be their experience, and with experience comes the contacts they have made over time.

                      There are buyer™s agents and seller™s agents in real estate.   Both are good, but I would suggest you find an agent/broker who you feel is trustworthy, and experienced in both the purchase and selling sides.   Remember, you may decide to keep the property or sell it and move on to the next challenge.   Once you have found your choice person to work with, be loyal to them.   Do not waste the person™s time by having them show you property after property and run comps unless you truly intend to use their services.   Once you get a list of properties that you might be interested in, drive by the property, look at the neighborhood and the properties™ curb appeal.   Then, if you are interested in seeing the inside, contact your agent/broker of choice and make an appointment to look and talk about the house.

                      See you next time for what happens next!

Let™s Get back to œFlipping!  So you looked and looked and finally found a property that you œthink you can make some money on.   Great, let™s look at where to start and how can we turn this property into a good profit.   Regardless of the condition of the property you selected, when remodeled it must contain some œwow! factors.  For the woman of the home, wow factors will be in the kitchen, master bedroom/& bath.   For the man of the house it™s the garage and the family room or man™s room if you can have both.  Let™s take a look at the ROI or return on investment.   Remember these figures are only averages and not a promise.   For a minor repair in the kitchen, the return would be approximately 85%.   With major remodeling, the return would be about 80%. & going overboard would waste money.   In the bathroom, returns can range from 73% to a major remodeling at about 85%. Replacing the windows with dual pain windows”expect about 85%.  With that said, let™s look at costs.   Kitchen remodeling can go up to $125,000, baths can cost up to $50,000, and so on; you get the idea.   Remodeling can be very expensive.   If you plan to go into a flipping program, remember to remodel with the idea of improving the safety and energy-efficiency of the house.  So is remodeling a good idea?   Yes, as good as it ever was, but you need to spend a lot of time with a sharp pencil and a good calculator.   Visit the local home repair stores to examine their prices and compare different stores.    Don™t forget to check on the electrical and gas systems to make sure they are up to code and that whatever remodeling/changing you plan will continue to keep them up to code.   If you are not sure, ask your local building department to inspect your home and advise you.   You may have to pay a small fee”but it will be a lot less than it would be if you should experience a fire or explosion.   Oh, and also remember that you will need permits.   If you try to sell property that was not permitted, the finance company may insist that you get the appropriate permits and then after the work is finished, the inspector will probably make you tear into the œwhatever so they can make sure everything was done to code.   So save yourself time and get the permits first.  Also remember that if you improve a property over the value of the neighborhood houses, then the value of your property tends to become the similar value of those homes.   Trying to sell a $700,000 home when the neighborhood homes are selling for $500,000 is going to be difficult if not impossible.         “ Have a good one!    

  If I may digress from the regular information about “Flipping,” here are some interesting statistics about Camarillo.   In mid April, approximately 65% of the listings were from regular sales, 12% from bank owned sales, with the remaining 23% as short sales.   In August the figures were approximately 78% regular sales, 5% bank owned, and 17% short sales.   The listings for regular sales increased from 65 to 78, an increase of 13% from April to August.   Short sale listings dropped from 23 to 17, a decrease of 6% and  regular sale listings dropped from 12 to 5, a decrease of 7%.

  Now on the sales side,  on the 25th of August, approximately 78% were regular sales, 5% bank owned, and 17% short sales.   In April those figures were 34% regular sales, 59% bank owned, and 7% short sales.   Regular sales increased from 34 to 65, an increase of 31%.   Short sales increased from 7 to 11 or 4%, and bank owned from 59 to 24, a decrease of 35%.

  It appears that on the listing side, regular sales increased dramatically and on the sales side, regular sales almost doubled.   Interesting.   Have a good one!

  Ever think that you might like to try “flipping” for some extra cash?   Maybe even “fix and rent” or whatever term you might call it–does it make any money?   During the next few blogs I will give you some of the ideas that I feel are important.

  Always remember the simple statement: “Spend time, don’t waste time!”   Important tip!!   You will be more profitable working only with Buy Fix Sell properties, where the rehab costs are under $15,000 to $20,000.   Should you locate a property with rehab costs over that figure, simply wholesale the property and save yourself the headaches.   The Buy Fix Sell technique can be used in any neighborhood and with any type of property.   The technique is simply this: acquire a property at a price that you can resell it at a profit.   Simple?   OK.   Try it!   It’s not as easy as it sounds.

  First you must locate the property, then determine if you can rehab it by yourself, or  if you have to hire out a lot of the work.   If you must hire the work done, you will have to find a less expensive house than if you can do all of the work yourself.  

  Try not to listen to the stories of how they just painted the front door and made a profit of $5,000, or here’s a really good one–one person claims to have just mowed the front lawn and made a profit of more than that.   Remember I said stories!   I don’t know of anyone who has had that kind of luck.  

  In my next few blogs, I will try to spell out some of the steps you should do if you want to make a profit or just fix up the place.   Till then, have a good one!